Asset Growth to RM10.6 Billion, Financing Growth of 18%

For the quarter ending 31 December 2010, Hong Leong Islamic Bank Berhad ("HLISB" or "Bank") expanded its asset base by 6% to RM10.6 billion from RM10 billion. The Bank's financing activities registered satisfactory growth, with net financing and advances up 18% to RM4.9 billion. Financing growth was driven by favourable, broad-based growth in both the consumer and business banking portfolios. Deposit franchise remained strong with a growth of 15% to RM8.9 billion from RM7.7 billion last year, providing the Bank with ample liquidity to fund its organic growth efforts.

In the first six months ending 31 December 2010 ("1H FY10/11"), the Bank's financial and value creation ratios all posted satisfactory result. The gross income before allowance and reserve reached RM203.9 million this year, up 22% as compared to RM166.9 million last year, backed by robust growth in all key business segments.

The Bank's strategic initiatives to build up a diversified deposit franchise over the longer term for sustainable business growth drove up the income attributable to depositors to RM110.4 million from RM75.5 million last corresponding period. While balance sheet asset growth was strong with an 18% rise in net financing and advances, the provisioning for collective assessment increased by RM14 million. The twin effects of these factors lowered the Bank's pre-tax profit to RM45.2 million, a decrease of RM17 million year on year. The Bank is satisfied that the fundamentals remain firm and the growth in the core business activities strong, with strengthened underlying operational capacity to sustain the growth momentum.The Bank maintained a good asset quality with a net impaired financing ratio of 0.4%, among the lowest in industry. The risk weighted capital adequacy ratio was 19%, well above the regulatory prudential requirement.

Going forward, the Bank is optimistic of its prospects and will remain focused on executing its business strategy to build a sustainable and more diversified business model, particularlyin Islamic wholesale banking and business banking.

-END-Press Release - 23/02/2011